Doberge
DIS Veteran
- Joined
- Jun 12, 2017
- Messages
- 548
Can buyers pay commission or *must* it be paid by the seller?
For sake of numbers I'll use a 10% commission. On a 300 point $150 contract the seller would net $150*100*90% or $40,500. Buyer is paying $45,500.
Can one offer $135 and buyer paid commission so seller gets the same $40,500? Here, the buyer pays $135*300*110% or $44,550.
Estoppel costs are the same either way so not considered in this exercise, but closing costs would likely also be a bit lower comparing $45,000 contract to $40,500 contract. For sake of numbers let's say another $50 is saved. The buyer has now saved $500 total without effecting the seller's bottom line.
The one that gets "screwed" here is the agency making $450 less commission. I don't think any of us feel sorry for agencies and high fees for quick work, but I can see that there might be pro-agency law prohibiting structuring offers this way.
For sake of numbers I'll use a 10% commission. On a 300 point $150 contract the seller would net $150*100*90% or $40,500. Buyer is paying $45,500.
Can one offer $135 and buyer paid commission so seller gets the same $40,500? Here, the buyer pays $135*300*110% or $44,550.
Estoppel costs are the same either way so not considered in this exercise, but closing costs would likely also be a bit lower comparing $45,000 contract to $40,500 contract. For sake of numbers let's say another $50 is saved. The buyer has now saved $500 total without effecting the seller's bottom line.
The one that gets "screwed" here is the agency making $450 less commission. I don't think any of us feel sorry for agencies and high fees for quick work, but I can see that there might be pro-agency law prohibiting structuring offers this way.
